European Tax Optimization 2026: Deductions & Wealth Tax

Every European country runs its own tax system, but the deduction logic is often similar. A well-prepared return can save thousands of euros — here's the playbook.

The deductions everyone should check

• Private pension contributions — typically deductible up to a national annual cap.
• Professional expenses — commuting costs, meals at work, training & continuing education, often up to a fixed allowance.
• Workplace pension top-ups — usually fully deductible, often the biggest single lever for high earners.
• Health insurance & medical costs — premiums up to a national cap, and medical bills above a minimum threshold of net income in many countries.
• Childcare — many countries offer a per-child allowance or credit.
• Donations to recognized charities, typically up to 20% of net income.
• Mortgage interest and maintenance for property owners, where still deductible.

Wealth tax

A handful of European countries — including Spain, Norway and parts of France — still levy a tax on net worth, though most abolished it decades ago. Where it exists:

• Rates and thresholds vary enormously by country and, in federal systems, by region.
• Pension assets are typically excluded from taxable wealth.
• Real estate is often valued below market price for tax purposes, while brokerage accounts, crypto and bank balances at year-end usually count in full.

Taxing owner-occupied property

Some countries add a form of imputed rental value to the taxable income of homeowners who live in their own property, then allow mortgage interest and maintenance costs to be deducted in return. Rules here vary widely and change frequently — several countries have reformed or are actively debating reform of this mechanism, so it's worth checking the latest guidance for your country each year.

Practical playbook

1. Maximise your tax-advantaged pension contribution every year — set up a standing order in January.
2. Plan larger pension top-ups across multiple years to keep the marginal tax benefit high.
3. Pay invoices for medical costs, training and donations before the end of the tax year so they land in the right period.
4. Keep digital receipts categorized — Finch tags deductible expenses automatically.

Open the Finch app each December to see deductible spending pre-totaled, ready for your tax return.